On one hand I kind of admire the tenacity of a man who can go from getting his ass tossed out of a nice comfortable gig analyzing stocks and bounce a couple of times only to end up pontificating on the web. The only problem is that many times his online pontifications only go to show why it was he ended up having his stock market membership card ripped up.
Today's post where he tries to show the rest of us mindless rubes as to why Microsoft is in desperate need of a reality intervention is a good example. Now given that its Friday though I can completely understand why he chose to try and get some Techmeme juice to carry him through the weekend. That doesn't change the fact that he likes to gloss over the fact in favor of the hot headline geared for the Digg crowd.
There's two points in his post where Blodget shows just how malleable the truth can be when massaged by a consummate spinmeister. The first is basically the lynch pin of his post but as Tom's Tech Blog points out quite rightly it's a point that is wrong
Blodget's response was…
What is Steve missing here? Microsoft had a monopoly in operating systems. When you have a monopoly, everyone buys your upgrades. They buy them because they're a bit better, yes, but mostly because they don't have a choice.
Now as anyone with even a hint of historical knowledge knows Microsoft did not have a Monopoly on the Operating System in the time of Windows 1, 2 or 3. In fact, they were so desperate to hang on to their DOS business that they jumped into bed with IBM and declared OS/2 the future of computing
And no, MS-DOS was not a monopoly. They had several viable competitors at every step of the chain. From Amiga to Apple, CP/M to Desqview and all those in-between.
The only reason that Microsoft is the force it is today is because they had a lot of luck and very smart business decisions on their side. I'm not saying that everything the company has done over its lifetime is right – far from it. Here's the thing though – computers, software and the Internet is a freaking business and in business being nice make you one of the biggest corporations in the world. Has Microsoft played underhanded hardball? Sure it has but then so has every other major successful corporation in the world.
Business isn't about being nice to your competitors – it's about cutting their throats at every possible turn. They all know it to – it's the price of becoming insanely wealthy.
A minor side point about something else Blodget says in his post (emphasis mine)
Yes, Microsoft demolished Netscape's browser lead, but that was because 1) Microsoft was able to build IE into Windows, and 2) Netscape took a wrong turn (into enterprise software). Microsoft never built the browser into an actual business, and in the past several years it has begun losing share to Firefox and Safari.
This argument kind of a loss leader though, used to make yet another useless point against the company. As far as Microsoft has been concern – rightly or wrongly – Internet Explorer is not a separate entity. To them it has always been an integral part of the operating system, both in technical terms and in mindset. I'm not saying this was the correct approach after all it is the one that got them into big trouble with the D0J, but Microsoft was never in the business of selling Internet Explorer – it was in the business of selling an operating system of which it was a part.
The second major point though that Blodget seems to make based on an assumption is that Microsoft will not succeed in besting Google when it comes to search because it isn't a part of the company's core competency. Of course to do this we would have to ignore the fact that search is indeed a part of their core competency because it is an integral part of Windows.
That point aside why does everyone assume that given the size of the search marketplace that Microsoft is going to come out of the gate trying to slap Google around. Suggesting something like this basically tells everyone that you think that some very smart business people, and not just in Microsoft, are idiots.
Idiots because they are even thinking of trying to chip away at getting even an incredibly profitable piece of the ever increasing search pie. Let's get serious here for a moment. You don't last the number of year as Ballmer has in this business by being a total idiot. sure he's made some bad decisions that have cost Microsoft but name me a top business executive who hasn't. shit happens they make mistakes.
To suggest though that a company the size of Microsoft should totally abdicate it's involvement in the business of search is stupid. Ballmer knows that they can't beat Google – they very well may never even come close, but that doesn't change the fact that percentage points of the search business is worth billions of dollars. For him to ignore that avenue would be irresponsible to the company and the shareholders.
Yes they have done a really lousy job of trying to get those percentage points but that doesn't mean they should stop trying. I don't know if Bing is going to be the answer, although I don't think they did themselves any favors with the name, but I also don't think they should just walk away from the table.
If this is the kind of advice Blodget gave his clients back in his stock market days it's no wonder they kicked him out of the club.
[pic courtesy of CNN Money]